The road to writing a business plan is long

A business plan is not a noun, it's a verb, said Kathy Hatfield, who recently completed a 54th revision of her business plan and received a bank's funding.

BY REBEKAH CANSLER MCGEEThe Dispatch

A business plan is not a noun, it's a verb, said Kathy Hatfield, who recently completed a 54th revision of her business plan and received a bank's funding to begin her business. One of the most important steps to opening a business and likely one of the most daunting as well is writing a business plan. Business leaders and counselors find the general public is often misinformed about the work, length of time and the process involved in writing a business plan. Martha Larson, director of Davidson County Community College's Small Business Center, offers her services as well as promotes the college's numerous free business classes. "First of all, you need to make a very thoughtful outline of what you plan to do, especially if you are a start-up," Larson said, noting that many small business start-ups do not take the time to think about practical things such as a time line and a budget.Before beginning market analysis, financials or demographics, Larson emphasized the budget and the outline, even before attending a "how-to" class. "People that have never written a business plan need to attend a 'how to write a business plan' class because it provides a very good overview. Once they receive the template that the class offers, this will help them know what types of info they need to create their own business plan," Larson said. In addition to garnering information, a potential business owner needs to make numerous calls to determine the likelihood of their business succeeding. Several of those calls would include a phone conversation with the local utility company to gauge the average price of utilities in a given area, competitors to learn the market and business professionals. Hatfield, owner of Almost Home Group, found gathering information for the market analysis was the hardest part. "The single most difficult thing (when writing a business plan) was the market analysis of whether my business was necessary. Basically when you are doing a business plan for financing, (the lender wants) to know if there are 13 yogurt shops in an area, why they need to open up another yogurt shop. You can say 'well I make the best yogurt,' but that's not going to work," Hatfield said.The Almost Home Group, located in the Perryman House in the Wallcliff Park neighborhood in Thomasville, is an assisted living home for seniors with memory loss. Hatfield began the company after her mother died and a short time later her father was diagnosed with Alzheimer's. After going to an assisted living home and discovering it would be over $8,000 a month to care for her father, Hatfield kept him at home with her. Through the seven years he lived with her, Hatfield learned the ins and outs of how to care for someone with Alzheimer's. When Hatfield discussed the cost involved with a friend who runs an adult day care center in Winston-Salem, the friend suggested Hatfield start her own home. The suggestion came in 2007, but it forever set the wheels in motion for the Almost Home Group. Hatfield began reading the county regulations in Forsyth County and went to a small business center at Winston-Salem State University where her initial gathering of information wasn't nearly enough. The process of going from the first original draft to the finished plan saw 54 drafts. Hatfield also turned her focus from Forsyth County to Davidson County after looking at a possible location in Thomasville. "Writing the business plan wasn't a full-time obsession, but I did something toward it every day for five years. I would get feedback from all friends and any random person I could get to read a 20-page boring document, and then I would revise," Hatfield said.The collection of business professionals that read Hatfield's business plan included a nurse, a doctor, a long-term health care insurance professional, a home health care person, a computer professional and an accountant among many others. "I've known people who worked on a business plan for 12 months, and some who have worked on it for three years. So it's not a quick and easy process. You invest time and energy into making that plan," Larson said. Larson said she sees a common stumbling block among many potential business owners: writing the financials portion of the business plan. "You have to be prepared to learn how to understand very basic financial statements or be prepared to consult with an accountant," Larson said. "The (DCCC) Small Business Center will also have a class next fall about financial statements. We make every effort to have education and consultation opportunities at every part of the business plan."But after the many versions, Hatfield eventually got everything in place and was funded by the Bank of North Carolina with 20 percent of her loan underwritten by the state's Capital Access Network Program."I really encourage people to have at least six full months operating capital of their own money saved up before they start. People go into business and they charge up their credit card and then lose everything they have. You have to save up for it because it is an investment in your future career. If you can't save for it, you'll never make it," Hatfield said. But Larson and Hatfield agreed that a business plan was not only needed for start-up funding, but it was also to provide guidance for the life of the business. "People who are in business need a business plan, too. A business plan is a dynamic thing, and it's going to change. As the focus of the business changes, as you add employees, expand or downsize, then your business plan will change. It will be an ongoing thing," Larson said. "This is my road map, but it will change and it has changed so many times. It's a fluid document," Hatfield said. "Things on paper don't necessarily always work."Many resources, including the Davidson County Public Library and the DCCC library, are available, Larson pointed out. There are also additional free Internet resources that one can use when writing a business plan. "I'm always very eager to meet with folks and let them know what free resources they have access to," Larson said. In addition to the free resources, DCCC will host a "How to Write a Business Plan" class Monday. During the class, participants will be provided with an overview of what is needed to write a business plan. A business plan template will be provided during the class, but Larson said she encourages people to only use the template as an outline. "A lot of lenders have seen the canned business plans before, and so we prefer that people just use them as guidance," Larson said. The class will be from 5:30 to 8 p.m. at the Uptown Lexington Education Center on East First Street. Registration is required; to register for the class, contact Larson at 224-4557 or mlarson@davidsonccc.edu. Rebekah Cansler McGee can be reached at 249-3981, ext. 228, or at rebekah.mcgee@the-dispatch.com.